The chief executive of leading timber company Premier Forest Group has praised the agility of his team to enable further business growth in 2020 despite the impact of Coronavirus on the sector.
At the start of the year, Premier was on track for a record-breaking year, but as the UK and Ireland went into lockdown in March, the business’s growth, like most others, stalled.
However, despite 50% of their customer base becoming dormant, Premier remained open and, crucially, kept their supply chain running so that when their customers returned, they were heavily stocked and able to meet the surge in demand that followed.
The company is now forecasting 20% growth in turnover and strong profits for its 2020/21 financial year, as a result of increased demand and product inflation. Hitting the forecast would mean reaching a turnover of £165m – a milestone for the Group. This success means Premier Forest is investing heavily in new technology and has recruited a number of new staff, with plans to increase staff numbers further in the New Year.
Terry Edgell, Chief Executive of Premier Forest Group, said:
“Some of the industries that we supply shut down in March and haven’t reopened. The exhibition industry and theatre production disappeared overnight.
“I can’t speak for others in our industry, but we were saved by the fact that we were able to stay open. We had to adapt our working practices pretty quickly but once we were assured of our staff’s safety, we were back up and running. That meant that when the contractors working on government projects such as the Nightingale and Dragon hospitals, or the modular buildings erected to provide extra capacity needed products, we were here and able to supply them.
“An upsurge in garden projects during spring and summer saw an increase in demand for things like decking and fencing which meant our sawmills were kept busy during this period.”
“None of this would have been possible if it hadn’t been for our amazing team. They faced the challenges head on and where we recognised issues, they quickly set about finding solutions.
“One of the issues we identified early on was a lack of online trading capacity, so we are investing heavily in our IT and ecommerce. We know that this is a worthwhile outlay as in Ireland, where we have already made a significant investment, we have seen a tenfold increase in online sales.”
Premier is still facing challenges, as well as the difficulties arising from the pandemic, worldwide there are issues surrounding a lack of wood supply and the Timber Trade Federation has been warning timber users and buyers to be proactive in their purchasing strategies. The problem has been exacerbated by pandemic issues, high global demand, competition for shipping containers and import logistics.
“This is an issue which has an impact on the whole of the timber industry and we certainly aren’t exempt; supply chains have slowed right down. We have had containers stuck in Antwerp since the start of December and we’re not expecting them to get to us until January at the earliest. That’s before you factor in any additional delays caused by Covid-19 or Brexit.”
With the terms of the Brexit deal still being negotiated, Premier is in the same situation as all other British businesses, having to prepare as best they can, despite a huge number of unknowns.
“We do have concerns as a major part of our business is based in Ireland. As well as the issues around borders and customs controls, we use trade loan facilities for financing stock and whereas we have previously done this through our British bank, from January we will have to open accounts in France for them to process the Irish transactions, which adds another level of complexity to imports that we didn’t previously foresee.
“There will be companies out there who will take months and months to untangle exactly how Brexit will impact them. They will find themselves dealing with changing product certifications and standards, as well as new bureaucracy around employees.
“Thankfully, we are in a slightly better position than some because we have a long history of importing from non-EU countries and we are used to dealing with customs entries, duties and legalities and have the IT infrastructure in place to deal with the complexities. For us, it’s just a waiting game to see what the terms are.”
Premier Forest Group is a vertically integrated timber operation engaged in the importation, sawmilling, processing, merchanting, and wholesale distribution of timber and timber products from its 16 sites in the UK and Ireland.